1. Precious Metals SME NY Chapter 11 March 2010 Jeffrey M. Christian Managing Director jchristian@cpmgroup.com 30 Broad Street | 37 th Floor New York, NY 10004 www.cpmgroup.com

2. The Macroeconomic Environment

3. Economic Tar Pits to Avoid While the depth of the recent recession has exceeded the problems of past recessions since the Great Depression, the degree to which this recession has been in line with other post-war recessions probably is greater than the degree to which it has greatly exceeded past recessionary trends. Global decoupling has not been happening. In fact, global economies are more interwoven with each other than before. The U.S. economy is not on its back, over the hill, passé, or particularly volatile. The Chinese economy most likely does not face a bust.

4. The Economic Outlook

5. The Economy has been less volatile than in the Good Old Days U.S. real GDP: 1850 – 1919, 16 recessions, 22 month average length; 1945 – 2007, 10 recessions, 10 months average length

6. The past 25 years to 2007 were the most stable in U.S. history U.S. real GDP: 1945 – 1983, 8 recessions, 11 month average length; 1983 – 2007, 2 recessions, 8 months average length

7. U.S. Inflation May Remain Calm

8. Inflation Fears Are Based On Narrow Money Supply’s Sharp Increase

9. But Inflation May Be Contained: Broad Money Supply Has Not Yet Expanded

10. Lagging Indicators Many market commentaries are focusing on the high, if not still rising, unemployment figures in the United States (and other countries), and the continued absence of bank lending to corporations and individuals as indications that the recession is still underway. Both of these factors tend to lag economic activity, however. Neither of them are leading indicators of an economic recovery. Unemployment tends to continue rising into an economic recovery, and only peak and decline well into a recovery. In past economic cycles banks have remained on the sidelines as lenders until an economic recovery is well established.

11. U.S. Unemployment

12. Credit availability has collapsed

13. The Dollar Will Remain The Main Reserve Currency For Years Slow diversification into the euro has been happening for a decade. It will continue to occur. There is no credible alternative to the U.S. dollar as the dominant reserve currency for the foreseeable future. Demand for U.S. dollars as a reserve currency is still strong. The dollar is unlikely to lose its reserve currency status in the foreseeable future.

14. The Dollar Will Remain The Main Reserve Currency For Years Source: Goldman Sachs

15. Commodities Prices and the U.S. Dollar

16. Market Myths About China There are many myths and misconceptions about short- and long-term trends in China’s economic development, and its place in the world. Myth 1: China will soon displace the United States and other industrialized nations as the major economic engine. Opposite Myth: The United States will continue to exert economic and political hegemony over the world. Both extremes are wrong. China is growing in importance. So, too, are other countries that are emerging from long periods of restrictive economic policies. While they will become ever more important to the global economy, they will not supplant the United States in terms of total economic size, either in real output or in consumption and investing.

17. Myth 2: The Chinese Economy Faces a Bust Concerns about a potential collapse in Chinese economic growth seem overblown.

18. World GDP Shares Major World Economies: Share of Global Gross Domestic Product 2008 Rank Percent of Total United States126.7% Japan29.1% China36.3% Germany46.1% United Kingdom64.8% France54.6% Italy73.6% Canada82.6% Spain92.5% Brazil102.3% India112.0% Russia121.9% Other27.5% Subtotal top economies72.5% Source: The Economic Research Service of the U.S. Department of Agriculture

19. The World is Changing Major World Economies: Share of Global Gross Domestic Product 20082030 Rank Percent of TotalRank Percent of Total United States126.7%122.8% China36.3%215.5% Japan29.1%35.2% Germany46.1%44.3% India112.0%54.2% United Kingdom54.8%63.7% France64.6%73.3% Brazil102.3%82.6% Russia121.9%92.4% Italy73.6%102.3% Canada82.6%112.2% Spain92.5%121.8% Other27.5%29.7% Subtotal top economies72.5%70.3% Notes: Adjusted for purchasing power parity. Source: The Economic Research Service of the U.S. Department of Agriculture

20. Then again… 200820301820 Rank Percent of TotalRank Percent of TotalRank Percent of Total China36.3%215.5%132.9% India112.0%54.2%216.0% France64.6%73.3%35.5% Russia121.9%92.4%45.4% United Kingdom54.8%63.7%55.2% Germany46.1%44.3%63.8% Italy73.6%102.3%73.2% Japan29.1%35.2%83.0% Spain92.5%121.8%91.9% United States126.7%122.8%101.8% Brazil102.3%82.6%NA Canada82.6%112.2%NA Subtotal top economies72.5%70.3%78.7% Notes: Adjusted for purchase power parity. Sources: Angus Maddison's The World Economy (1820); ERS, USDA (2008, 2030)

21. Gold

22. Long-Term Gold Prices & the Recent Price Surge

23. Investment Demand’s Effect on Gold Prices

24. Gold As a Percentage of Financial Assets

25. Official Transactions

26. Monthly Official Transactions

27. Central Bank and Investor Gold Holdings

28. Annual Total Supply

29. The Price of Gold and Cash Operating Costs of Production

30. Annual Total Demand

31. Silver

32. Long-Term Silver Prices & the Recent Price Surge

33. Daily Silver Prices

34. Investors Continue to Buy High Volumes of Silver Net buying or selling by investors always has been the major driver behind price increases and decreases. Net investment demand could reached 175.1 million ounces last year.

35. Silver Supply and Fabrication Demand Balance Fabrication demand rose from the early 1980s to 2000, but has dropped steadily since 2000. Supply lagged into the middle of the 1990s, but then started rising sharply. From the early 1990s through 2005 silver from investor holdings filled the gap between demand and supply.

36. Estimated Total Silver Bullion Inventories

37. Annual Total Supply Total supply is estimated to have been 813.0 million ounces last year. This year total supply could rise to 849.6 million ounces. Both mine production and secondary supply are expected to rise.

38. Estimated Silver Production Additions

39. Silver Mine Production

40. Cash Cost of Silver

41. Silver Reserves and Reserve Base Source: USGS, CPM Group

42. Annual Total Fabrication Demand Fabrication demand is projected to rise to 642.1 million ounces this year. Fabrication demand is estimated to have been 637.9 million ounces in 2009. 10p

43. Jewelry and Silverware Demand 10p

44. Photographic Demand

45. Electronics and Batteries

46. Strong Investor Interest in Silver Note: CEF-Central Fund of Canada traded on the Toronto Stock Exchange. SLV-iShares Silver Trust traded on the American Stock Exchange. ZKB-Zurich Cantonal traded on the Swiss Exchange. ETF-ETF Securities traded on the London Stock Exchange, New York Stock Exchange, and Australian Securities Exchange. Data as of 15 January 2010.

47. Platinum Group Metals

48. Platinum Prices

49. Platinum Supply and Fabrication Demand Balance

50. Platinum ETF Holdings

51. Palladium Prices

52. Palladium Supply and Fabrication Demand Balance

53. Palladium ETF Holdings

54. Gold and Silver ETF Holdings: U.S. Market Share  Gold ETF Holdings United States : 70.1%

55. Global Vehicle Sales

56. Precious Metals Yearbook launches  Gold Yearbook 27 April  Silver Yearbook 11 May  Platinum Group Metals Yearbook 22 June

57. Gold Yearbook Released on 27 April CPM Group will be releasing the CPM Gold Yearbook 2010 on 27 April. To obtain more information contact Adam Crown at 212.785.8320 or via e-mail at acrown@cpmgroup.com acrown@cpmgroup.com

58. Thank You. Jeffrey M. Christian Managing Director jchristian@cpmgroup.com 30 Broad Street | 37 th Floor New York, NY 10004 www.cpmgroup.com